At least the market for new homes isn’t getting worse anymore, and that’s the first step to getting better. The overall economy is actually getting a small boost as more buyers walk into model houses ready to sign contracts and builders hire workers to pour foundations and pave roads. Construction of single-family homes rose in July for the fifth straight month, edging up almost 2 percent to the highest level since October, the government said yesterday. Building permits climbed nearly 6 percent.

Single-family home construction posted a modest rebound in April, raising hopes that the three-year slide in housing is leveling off. But a bulging supply of unsold homes, record levels of foreclosures and still-falling home prices suggest that a sustained recovery isn’t likely until next spring at the earliest.

If the decline of real estate prices is the central problem in the current recession, it should follow that the Obama administration should concentrate more effort on stabilizing housing values—rather than spending $1 trillion (with more to come) shoring up the balance sheets of financial institutions that have been decimated by the devaluation of “toxic” assets.